Understanding the Perfection of Transfer (POT) and Perfection of Charge (POC)

The Perfection of Transfer (POT) and Perfection of Charge (POC) are both essential dealings in transferring ownership of a property.
In most case scenarios, when a person buying an under-construction property from a developer, the property is still under Master Title. More often than not, the Master title denotes to a bigger piece of land, which including building lots or parcel lots that have not been divided into individual lots, be it building or parcel lots.
Ultimately, that piece of land will be sub-divided to a smaller lots, which to be identified as Strata title or Individual title. And, this is where when you need to perform the process of either a POT and/or POC, as the case maybe.

What is Perfection of Transfer?

Perfection of Transfer requires the transfer ownership when an Individual Title or Strata Title has been issued after one has purchased the property.
There are situation where a Perfection of Transfer might be required as well i.e. when buying a property directly from another individual, this happens when the Strata/Individual Title has been issued when the property is sold.

What is the basis process of Perfection of Transfer?

The steps are very straight-forward. The purchaser pays the legal fees, stamp duty, and disbursements accordingly. Both purchaser and developer sign the Form 14(A) subsequently we submit the Form 14(A) to LHDN. Once the stamp duty is paid, registration of ownership and extraction of registered title deed will be carried out at the Land Office.

How Perfection of Transfer is calculated?

POT quotation includes an MOT’s professional lawyer’s fees, stamp duty, as well as disbursement fees such as such as registration fees, consent to transfer, land search, winding up and bankruptcy search, transportation, photocopies, etc. Generally speaking, a significant amount comes from Stamp Duty and in such cases, you can ignore the same if you have already paid for stamp duty earlier.

What is Perfection of Charge?

The Perfection of Charge on the other hand, a transaction to have the Bank’s charge created on Individual or Strata title, whom supplied the home loan to the Purchaser and/or the Borrower to finance purchase the property.
That means when a Perfection of Transfer is needed to transfer the ownership from a developer or seller, a Perfection of Charge is required in order to then transfer the ownership to the Bank.

What is the basis process of Perfection of Charge?

Both Purchaser and/or Borrower and the bank sign Form 16A (Charge) and Annexure. Subsequently, the Charge and Annexure are to be stamped at LHDN and registration of charge is to be carried out at the Land Office. Upon extraction of title, the Original Document of Title is to be forwarded to the bank for safe keeping and the Purchaser and/or Borrower will receive a copy of the title and a copy of Form 16A.

How Perfection of Charge is calculated?

POC quotation includes more of the same listings as the POT, save and except the stamp duty. In the case of perfection of charge, the stamp duty is only RM40 to stamp the relevant documents.

If you have any questions or require any additional information, please contact our lawyer that you usually deal with.

This article is written by
Liew Chen Siang
Partners, Low & Partners
Anastasia Lim Yee Zing
Senior Associate, Low & Partners
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